Since 2006 the U.S. Trust Study of High Net Worth Philanthropy has examined the giving and volunteering trends, behaviors, attitudes, and priorities of American households with a net worth of $1 million or more (excluding the value of their primary home) and/or an annual household income of $200,000 or more. The most recent installment, written and researched in partnership with the Indiana University Lilly Family School of Philanthropy, was released a few months ago. Here are some takeaway highlights:
More Women are Giving: While it’s not a large margin, 49% percent of respondents identified as men while 51% were women.
What Women are Supporting: Women were more likely to support health care and medical research with 40% of their giving going to these organizations.
Most Wealthy Households Donate: 90% of high net worth households in this study donated to charity in the past year, as much higher rate of giving than the general population of U.S. households at 565.
Basic Needs Charities Top the List: Wealthy donors gave to an average of seven different nonprofit organizations which supported a wide rage of causes. However, basic needs organization received support from the largest percentage at 54%.
Volunteering Plays a Huge Role in Charitable Giving: 48% of wealthy individuals volunteered their time and talents to charitably organizations they care about – nearly twice the rate of the general population at just 25%. Women were more likely to volunteer than men (56% vs. 41%). However, Hispanic-Americans volunteered well above the study average at 60%. Most that were surveyed said they were volunteering in response to an organizational need (65%) and believing that the individual could make a difference was the second highest motivation at 56%.
Donors Give for Specific Reasons: There are both personal and altruistic reasons for the wealth donors’ giving. Among the top responses are that they believed in the mission of the organization (54%) and that they believe their financial gift can make a difference (42%). Receiving tax benefits is not a prime motivation for giving, with just 17% of wealthy donors saying it was a motivation for giving.
Challenges for Donating: The wealthy donors reported the greatest challenge when it comes to charitable giving is identifying what causes they care about and deciding from there where to donate. 45% of wealthy donors said this was the largest obstacle. Secondly, 37% said they had trouble understanding how much they can afford to give.
Family Comes First: When asked how they would ultimately like to distribute their wealth, 74% of high net worth individuals reported that they intend to leave the majority to their children and grandchildren. 12% of those surveyed said they would leave their wealth to other heirs and 14% said they intend to leave 23% of their wealth to charities.
While the survey did not address life insurance death benefits directly, it is important to point out that the death benefit from a permanent life insurance policy may be directed by the policy holder towards individuals and charitable organizations alike. This death benefit is not generally subject to probate or other legal entanglements. This can give individuals across a wide variety of economic conditions and financial means a way to contribute a legacy to their heirs or support causes they identify with. Given the optimistic outlook towards charitable giving outlined in this study, permanent life insurance may provide an attractive solution for a variety of philanthropically-minded individuals.
Contact a dedicated Simplicity Life representative today to discuss all life insurance options available for yourself and your clients. 800.921.3100.